Core Viewpoint - The fluctuations in the USD to CNY exchange rate significantly impact various sectors, including cross-border e-commerce, study abroad families, and purchasing decisions for consumers [1][2][9]. Group 1: Impact on Different Sectors - For purchasing agents, every exchange rate fluctuation directly affects their profit margins, prompting them to monitor rates closely to capitalize on favorable conditions [2]. - Study abroad families are particularly concerned with long-term exchange rate impacts, as annual fluctuations can affect their overall budget for expenses like dining [2][6]. - Cross-border e-commerce businesses view exchange rate changes as opportunities for profit, leveraging small differences in rates to enhance their margins [2][9]. Group 2: Daily Life Implications - The current exchange rate allows for specific purchases, such as 3 USD equating to 21.5178 CNY, which can buy a coffee or a public transport ticket in China, highlighting the value differences across countries [3][6]. - An increase in the exchange rate means travelers need to spend more CNY to obtain the same amount of USD, while a decrease can lead to savings [6][9]. Group 3: Exchange Rate Monitoring - Individuals can easily check the latest exchange rates through mobile banking apps or platforms like Alipay and WeChat, as rates fluctuate frequently [7][10]. - Ignoring exchange rate changes can lead to financial losses, as even small differences can accumulate significantly over time, affecting larger transactions [9]. Group 4: Exchange Strategies - Ordinary citizens should assess their actual need for foreign currency before exchanging, as minor fluctuations may not warrant concern [12]. - For those planning to invest in foreign funds, a strategy of gradual purchases based on market trends is advisable [13].

Report Summary 1. Report Industry Investment Rating No industry investment rating is provided in the report. 2. Core Viewpoints The report analyzes the liquidity situation from June 16 - 20, 2025, indicating that the overall capital market shows a state of balanced and slightly loose funds, with some indicators showing upward or downward trends, and the market's expectation of the capital situation is relatively stable. Attention should be paid to the impact of factors such as the end - of - quarter credit impulse and government bond supply on the capital market [1][2][3]. 3. Summary by Related Content 3.1 Open Market Operations and Fund Rates - Last week, the open - market maturity was 1040.2 billion yuan, including 858.2 billion yuan of reverse repurchase maturity and 182 billion yuan of MLF maturity. The open - market investment was 960.3 billion yuan, all in reverse repurchase, with a net withdrawal of 7.99 billion yuan. The overall capital situation was balanced and slightly loose, with the average DR007 at 1.52%, up 0.5BP from the previous week, and the average R007 at 1.58%, up 1BP from the previous week. The average DR001 and R001 were 1.38% and 1.44% respectively. The exchange repurchase rate increased, with the average GC007 at 1.61%, up 4BP from the previous week. As of the last trading day of last week, the outstanding balance of reverse repurchase was 960.3 billion yuan, up from the previous week [1]. 3.2 Certificate of Deposit (CD) and IRS Yields - Last week, the total maturity of CDs was 1021.64 billion yuan, the issuance was 1102.32 billion yuan, and the net financing scale was 80.68 billion yuan. As of the last trading day of last week, the yield to maturity of 1 - year AAA CDs was 1.64%, down from the previous week. This week, the single - week maturity scale of CDs is about 1137.81 billion yuan, with a greater maturity pressure than the previous week. In terms of interest rate swaps, the average of the 1 - year FR007 interest rate swap last week was 1.53%, up from the previous week. The market's expectation of the capital situation is stable, and CDs are more affected by seasonal supply - demand pressure [2]. 3.3 Repurchase Volume and Institutional Behavior - Last week, the volume of pledged repurchase was between 7.7 - 8.8 trillion yuan, with the average R001 repurchase volume at 7462.2 billion yuan, up 361.4 billion yuan from the previous week. As of the last trading day of last week, the outstanding balance of repurchase was 12.7 trillion yuan, up from the previous week. The repurchase leverage has returned to the high point of December last year. By institution, the lending scale of large banks increased, while that of money market funds decreased. The borrowing scales of securities firms, funds, and wealth management increased. As of Friday, the repurchase balances of large banks and money market funds were 5.30 trillion yuan and 1.94 trillion yuan, up 358.3 billion yuan and down 9.4 billion yuan respectively from the previous week. The positive repurchase balances of securities firms, funds, and wealth management were 1.86 trillion yuan, 2.47 trillion yuan, and 777.6 billion yuan respectively, up 21.7 billion yuan, 83.5 billion yuan, and 55.6 billion yuan respectively from the previous week [3]. 3.4 Bill Rates and Exchange Rates - Last Friday, the 6M national stock bill transfer quotation was 1.05%, up from the last trading day of the previous week. Near the end of the quarter, attention should be paid to the situation of credit impulse. Last Friday, the US dollar - to - RMB exchange rate was reported at 7.18, up slightly from the previous week, and the Sino - US interest rate spread narrowed. Last week, the Fed held its June FOMC meeting, keeping the federal funds rate target range at 4.25 - 4.5%, maintaining the interest rate unchanged for four consecutive times, while raising the inflation forecast and lowering the economic growth forecast, suggesting an increase in stagflation risk. Due to the Fed's caution, the approaching inflation pulse, and the Treasury's supply pressure, short - term US bond yields may remain high [4]. 3.5 This Week's Key Concerns - This week, the open - market capital maturity is 1060.3 billion yuan, including 960.3 billion yuan of reverse repurchase maturity and 100 billion yuan of treasury deposit maturity. On Friday, China's industrial enterprise profits for May will be announced, and attention should be paid to the enterprise profit repair situation. The eurozone's economic sentiment index for June will also be announced on Friday, and attention should be paid to the eurozone's economic trend. In addition, the US PCE for May will be announced on Friday, and attention should be paid to the inflation trend. This week, the 7 - day repurchase starts to cross the quarter, and the government bond supply scale is large. Attention should be paid to the impact on the capital situation [5].

Group 1: Exchange Rate Outlook - The USD/CNY spot exchange rate is expected to remain above 7.0 in the second half of 2025, unless there is a significant improvement in US-China relations or a notable increase in domestic economic recovery slope[2] - The USD/CNY exchange rate has shown a downward trend, fluctuating between 7.1 and 7.5 since the beginning of 2025, primarily due to geopolitical tensions and trade relations[7] - A technical breach of 7.0 in the spot exchange rate may occur but is likely to be temporary, reflecting market microstructure adjustments rather than a fundamental policy shift[25] Group 2: Policy Anchors - The central bank's policy focus is on enhancing exchange rate flexibility while preventing excessive fluctuations, maintaining a balance between market forces and macroeconomic stability[17] - The central bank's management framework emphasizes a "managed floating exchange rate system," aiming to stabilize the RMB against a basket of currencies rather than solely against the USD[12] - The probability of the USD/CNY exchange rate falling below 7.0 is low due to structural constraints in domestic economic recovery and external geopolitical risks[25] Group 3: External Economic Environment - The IMF forecasts global economic growth at 3.0% for 2025, down from a previous estimate of 3.3%, indicating a synchronized slowdown among major economies[29] - China's economic growth forecast has been revised down from 4.5% to 4.0%, reflecting a significant adjustment of 11.1% due to slower domestic demand recovery[29] - The weakening of global growth dynamics is expected to exert additional pressure on the RMB, limiting its ability to strengthen independently[34]

Core Viewpoint - The offshore RMB has recently seen a decline against the US dollar, with the exchange rate breaking the 7.1800 mark, indicating a downward trend in the value of the RMB [1] Exchange Rate Summary - The offshore RMB is currently quoted at 7.1799, reflecting a daily decrease of 0.26% [1] - The onshore RMB is reported at 7.1904, showing a daily decline of 0.24% [1]

Core Viewpoint - Standard Chartered Bank indicates that the US-China trade negotiations have significantly exceeded market expectations, which may lead to a slight weakening of the USD against the RMB [1] Group 1 - The trade talks between the US and China have shown more positive outcomes than anticipated by the market [1] - The potential impact of these negotiations could result in a minor depreciation of the US dollar relative to the Chinese yuan [1]

Group 1: Report Investment Rating - There is no information about the industry investment rating provided in the report. Group 2: Core Views - The USD/CNY exchange rate showed a weak and volatile trend from late April to early May, with the stage high around 7.35 and then falling back to 7.27. The offshore RMB appreciated rapidly during the May Day holiday due to multiple factors such as improved Sino - US trade expectations, a callback in the US dollar index, and a warming of market risk appetite. The US dollar index fell about 4.5% in April, a relatively large monthly decline in recent years. The implied volatility of options first rose and then fell, and the implied volatility of call options declined, making the RMB exchange rate more two - way fluctuating [4]. - In April, China's macro data weakened month - on - month but was better than expected overall, while US growth data fell short of expectations. China's manufacturing PMI dropped to 49.0, indicating short - term pressure on the manufacturing industry, but the high - tech manufacturing PMI remained in the expansion range of 51.5, and the non - manufacturing business activity index was 50.4, with the service industry's recovery momentum continuing. In the US, the ISM manufacturing PMI in April slipped to 48.7, and the first - quarter GDP was - 0.3%, driving the Citigroup Economic Surprise Index significantly lower; during the same period, China's CESI continued to rise and was higher than that of the US at the end of April [4]. - The Sino - US interest rate spread remained inverted, the short - end interest rate spread became more stable in its fluctuations, and more statements on trade policies brought short - term disturbances to the exchange rate. The better - than - expected non - farm payrolls in April slightly pushed up the short - end yield of US Treasuries, while the yield of Chinese government bonds remained low due to policy expectations, pushing the spread structure to stabilize at a high level. The basis and swap points of USD/CNY rose simultaneously, indicating that the market was re - evaluating the exchange rate path. Sino - US frequent statements on tariff issues from April to May, although no clear policies were implemented, strengthened the policy game signal and affected market pricing and trading behavior [5]. - The deficit in foreign exchange settlement and sales narrowed, and the capital flow improved. In March 2025, the deficit in bank foreign exchange settlement and sales dropped to $2 billion, a significant reduction from February. The willingness to settle and purchase foreign exchange in the forward market both increased, with the settlement rate of foreign exchange receipts rising to 50.51% and the purchase rate of foreign exchange payments rising to 58.88%. The surplus in banks' foreign - related payments and receipts on behalf of customers reached $49.2 billion, and the net inflow of funds under the goods trade increased 1.2 times year - on - year, still being the main supporting force. The capital account deficit narrowed to $13 billion, with foreign investors continuously net - buying RMB bonds, and the allocation of bonds and equities improved simultaneously, indicating that foreign funds' preference for RMB assets had recovered [5]. - The RMB is expected to be relatively strong in the short term, and the USD/CNY exchange rate is expected to enter a period of shock consolidation. Against the background of the callback of the US dollar index, the repair of the Sino - US expectation gap, and the warming of market risk appetite, the RMB has been relatively stable. Looking ahead, the exchange rate direction will still be comprehensively affected by Sino - US trade policies, signs of a slowdown in the US economy, and related policy expectations, and the stage - by - stage fluctuations may intensify. Short - term trend judgment still needs to closely monitor event evolution and data feedback [6]. Group 3: Summary by Directory 1. USD/CNY Exchange Rate - General Situation - From late April to early May, the USD/CNY exchange rate was generally weak and volatile, falling from a high of around 7.35 in mid - April to around 7.27 in early May, with the RMB strengthening intermittently. The offshore RMB appreciated rapidly during the May Day holiday, reflecting the combined effects of Sino - US trade easing expectations, US dollar adjustment, and a warming of market risk appetite. The US dollar index continued to decline in April, with a monthly decline of about 4.5%, one of the larger monthly declines in recent years. The decline was mainly affected by the weak economic growth in the first quarter of the US and the market's uncertain expectations about the Fed's interest - rate cut path this year [10]. 2. Volume - Price Observation - From April to early May 2025, the volatility of the USD/CNY options market generally increased, but signs of a local decline began to appear. Compared with March, the implied volatility from April to early May was generally stronger, indicating that the market's expectation of exchange - rate fluctuations had increased. However, in early May, the implied volatility of the call side of USD/CNY options declined, narrowing the gap with the put side, suggesting that the market's expectation of the US dollar's unilateral appreciation had weakened [17]. - The RMB counter - cyclical factor has been running below 10% steadily, indicating a stable exchange - rate operation. The 3 - month interest rates of offshore and onshore RMB have remained inverted, indicating a tight supply of offshore funds. However, in May, the inversion margin narrowed slightly, reflecting a marginal easing of cross - border liquidity tension [17]. - In early May, the yield of US Treasuries was generally higher than the average in April, especially at the short end, and the market's bet on the Fed's short - term policy shift has weakened. Nevertheless, the yield of 10 - year US Treasuries has fallen from the high in April, indicating that long - term interest rates are still in an adjustment channel. The yield of Chinese government bonds was weaker than last week and last quarter, and the market's expectation of further flexible adjustment of domestic policies has increased [17]. - The basis and swap points of USD/CNY generally showed an upward trend, reflecting the market's need to re - price the exchange - rate fluctuation direction in the short term under the influence of the Sino - US interest - rate spread and market risk - aversion demand. The change in the exchange - rate price is still coupled with the macro - expectation, but the directional signal is not clear, and it mainly shows structural adjustment and defensive pricing for event catalysis in the short term [18]. 3. Macroeconomic - Chinese Macroeconomic Data - In April 2025, China's economic sentiment indicators generally declined, but domestic demand, high - tech manufacturing, and the service industry maintained a certain degree of resilience. The official manufacturing PMI fell to 49.0%, down 1.5 percentage points from the previous month, falling back into the contraction range, indicating a phased decline in the manufacturing industry's prosperity level. However, the high - tech manufacturing PMI was 51.5%, significantly higher than the overall manufacturing level, reflecting the continued structural optimization trend [32]. - The non - manufacturing business activity index was 50.4%, slightly lower than the previous month but still in the expansion range, indicating that the service and construction industries generally maintained a recovery momentum. The new order and business expectation indicators increased month - on - month, indicating an improvement in market demand and business confidence. However, the employment index remained below the critical point, indicating that the recovery of business employment was still slow. In general, the composite PMI output index in April was 50.1%, lower than the previous month, indicating that the economy generally maintained expansion but with a slowdown in momentum [32]. 4. Macroeconomic - US Macroeconomic Data - In April 2025, the US macro data presented a combination of "stable employment, declining manufacturing, and policy wait - and - see", and the market's expectation of the Fed's policy path has been adjusted. The non - farm payroll data in April showed that the US added 177,000 non - farm jobs, higher than the expected 138,000, indicating that the labor market remained resilient. The unemployment rate remained at 4.2%, the same as the previous value, and the labor - force participation rate rose to 62.6%, with the participation rate of the core labor - force group aged 25 - 54 reaching a seven - month high, reflecting a solid employment foundation. However, the non - farm payroll data for March and February were revised down by a total of 58,000, indicating that the previous employment growth may have been overestimated [35]. - In terms of manufacturing, the ISM manufacturing PMI in April dropped to 48.7, back into the contraction range, the largest monthly decline this year. Detailed data showed that the new order and output indicators both weakened significantly, and the employment index declined for the third consecutive month. The increase in input costs and order uncertainty caused by tariff policies are weakening enterprises' willingness to replenish inventory and expand production. The final value of the Markit manufacturing PMI was 50.2, also lower than the initial value and expectations, further verifying the lack of growth momentum in the manufacturing industry [36]. 5. RMB Three - Factor Fitting - As of early May, the Sino - US Treasury yield spread generally remained inverted. Recently, the short - end yield of US Treasuries rebounded rapidly due to better - than - expected non - farm payrolls, while the yield of Chinese government bonds remained low under the influence of policy expectations, leading to a slight stabilization after an increase in the short - end spread inversion margin [38]. - From April to early May 2025, there were more statements related to Sino - US trade policies, and the market's attention to tariff - policy changes increased. As of early May, neither side had announced a specific negotiation schedule or clear policy documents, but both had shown a willingness to communicate. The market generally believed that there was still uncertainty about the pace of policy implementation. Under this background, the external - demand sub - index of China's manufacturing industry weakened in April, and the US ISM manufacturing survey also showed that tariffs had an impact on the cost side and delivery rhythm [45][46]. - In April 2025, the Citigroup Economic Surprise Index (CESI) showed an expanding difference in Sino - US macro - expectations. China's CESI rebounded and turned positive, reflecting that the domestic macro data were generally better than expected, mainly due to the improvement in high - tech manufacturing, non - manufacturing business activities, and export data, which drove the market's expectation of short - term domestic - demand repair and policy support to improve. In contrast, the US CESI fell from a high in March and continued to decline in April, falling into negative territory, mainly dragged down by lower - than - expected first - quarter GDP, weak retail, and ISM manufacturing data, indicating a significant adjustment in the market's expectation of US growth momentum [47]. 6. Capital Flows from the Perspective of Foreign - Exchange Settlement and Sales - Foreign - Exchange Market Supply - Demand Balance - The deficit in foreign - exchange settlement and sales narrowed significantly, and market expectations became more stable. In March 2025, the bank's foreign - exchange settlement was $189.6 billion, and sales were $191.6 billion, with the deficit narrowing to $2 billion from $10.4 billion in February. This change reflects the phased stabilization of the RMB exchange rate, the rationalization of enterprises' and residents' foreign - exchange purchase behavior, and the alleviation of the market's concern about the RMB's unilateral depreciation [49]. - The behavior of forward foreign - exchange settlement and sales was adjusted, and the demand for hedging increased. In March, the willingness for forward foreign - exchange settlement and sales in the market adjusted structurally. After excluding the performance factor, the settlement rate of foreign - exchange receipts increased to 50.51% month - on - month, indicating an enhanced willingness of export enterprises to lock in exchange rates. At the same time, the purchase rate of foreign - exchange payments increased to 58.88% month - on - month, indicating that enterprises actively increased their foreign - exchange purchase exposure to strengthen the hedging of US - dollar risks in the context of increasing trade and macro uncertainties [49]. - In March 2025, the bank's foreign - related income on behalf of customers was $692 billion, and payments were $642.8 billion, with a foreign - related payment - receipt surplus of $49.2 billion, further expanding from $29 billion in February. By item, the net inflow of cross - border funds under the goods trade in the first quarter reached $206.3 billion, a 1.2 - fold increase year - on - year, still being the main source of funds. The net outflow of cross - border funds in the service trade increased 25% year - on - year, with the outflow under travel increasing 12%, but the overall situation remained controllable. The stability of the cross - border payment - receipt structure has been enhanced, providing a basic support for the foreign - exchange market [50]. - The capital account deficit continued to narrow, and the deficit in March narrowed to $300 million from $13 billion in February. The securities investment account turned into a surplus, and foreign investors' willingness to allocate bonds increased significantly. Data showed that from February to March, foreign investors cumulatively net - bought $26.9 billion of domestic bonds, an 84% increase year - on - year; from April 1 to 18, they further net - bought $33.2 billion, maintaining a high - speed allocation rhythm. The allocation of equities also stabilized, indicating that foreign investors' confidence in RMB assets had recovered [52].